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Contents
Foreword 1
1. Highlights 2
2. Introducing the survey 3
3. Award winners 6
4. Survey results 8
5. EPRA reporting measures 11
6. Investment property reporting 13
7. Reporting developments 15
8. Award process 16
9. Participant list 17 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below.
Foreword
Speeding ahead Following the release of the guidance on cost ratios I am delighted to announce the results of our EPRA by EPRA, 36% of the companies have already adopted Annual Report Survey 2013 / 2014. The survey these new ratios. Reflecting the relevant overhead and comprises a review of 84 annual reports from operating costs of the business, these ratios provide a leading listed real estate companies across Europe recognised benchmark for analysis of the companies’ to assess compliance with EPRA’s Best Practices costs. Recommendations (BPR). For the first time, the results As companies strive to reach new heights in their take into account the adoption of the new EPRA cost compliance, we would like to see greater attention paid ratios that were published in July 2013. to areas of the BPR such as: like-for-like rental growth Emmanuel Proudhon The survey results this year have shown a significant reporting and reporting on development projects. Director improvement of the top scorers. Awarded companies Finer review also shows room for improvement and Deloitte France are speeding ahead, with nine new Gold Awards, there is a need for additional comments on variations +33 (0) 1 58 37 91 17 increasing their compliance with the BPR, while a third or supplementary explanations when requested by the [email protected] of the companies reviewed still need to take notice of BPR. the EPRA BPR and invest time in bringing their financial Recognising that there are many business models used reporting up to speed with the rest of their peers. by property companies and that progress still has to This year EPRA has wanted to put more emphasis on be made in the adoption of the BPR, EPRA released in companies which have outstandingly improved their January 2014 an additional guidance to clarify issues 61% reporting. Hence, five companies have been granted arising in the practical implementation of the principles- OF COMPANIES the award of the “Most Improved Annual Report”. I based BPR. Although not formally part of the BPR, this BY MARKET would like to congratulate this year’s winners: Aedifica, additional guidance is expected to facilitate the wider CAPITALISATION Icade, Intervest Offices & Warehouses, Nieuwe Steen use of the BPR. HAVE ALREADY Inv (NSI) and Wereldhave. Besides the significant ADOPTED AT Finally, I would like to thank the team of reviewers at improvement of their annual reports, which were LEAST ONE OF Deloitte from across our European real estate practice granted among the best scores for the quality of the in Amsterdam, Brussels, London, Munich and Paris. A THE NEW EPRA reporting on EPRA performances measures, they are special thanks to Evgeniya Popova for her involvement COST RATIOS striking examples of the leap forward identified last in putting together this report and to Andrew Saunders year. for his valuable review. EPRA Performance Measures have now been generally Please contact myself, or alternatively Andrew Saunders endorsed. Their importance to raise the standard and at EPRA, if you would like any further information consistency of performance reporting in the real estate about this survey. Deloitte real estate teams from industry has been widely acknowledged with 81% of across Europe were involved in the survey and would companies disclosing at least one EPRA Performance be pleased to welcome the opportunity to meet locally Measure (representing 91% by market capitalisation) with companies to discuss the survey and individual and 73% (by market capitalisation) at least three EPRA company results, as well as current trends in financial Performance Measures. reporting.
“I am very pleased to notice that REITs have achieved better performance disclosure through higher transparency and, even more importantly, higher comparability. We are all attentive to investors’ expectations on this matter and we are convinced that, in an uncertain economic environment like ours, transparency conveys confidence. EPRA BPRs tend to become a reference; they have been instrumental in the progress made. Some may find that this is not going fast enough or not reaching far enough; be assured that I strive to widen the framework. But looking at things carefully, I find that few industries have come to this level of harmonization—which we can collectively be proud of.”
Serge Grzybowski CEO, Icade and Chairman of EPRA
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1. Highlights
50% of the companies in the survey gained an award: 25 GOLD AWARDS MOST IMPROVED 9 SILVER AWARDS ANNUAL REPORT 8 BRONZE AWARDS Award have been granted to : • Icade • Nieuwe Steen Inv (NSI) • Wereldhave • Aedifica • Intervest Offices & Warehouses
As the listed property sector reaches new heights in the adoption of the EPRA BPR across Europe, increases in average country scores were shown in Belgium, 46% France, the Netherlands and Switzerland Disclose the EPRA Performance measures summary table, a clear improvement compared to last year (36%)
Awarded companies are speeding ahead: new GOLD AWARDS AVERAGE SCORE OF 36% AWARDED COMPANIES of companies disclosed the new 9 INCREASE FROM 72% COST RATIOS in accordance with LAST YEAR TO 77% the EPRA cost measure published in July 2013
STILL LITTLE OVERALL IMPROVEMENT in compliance with the Investment The net initial yields and vacancy Property Reporting and Additional rate disclosures are gaining disclosures sections of the BPR traction: 45% DISCLOSE NIY AND 55% DISCLOSE VACANCY
Disclose at least one performance measure The more widely adopted performance (representing 91% by market capitalisation measures have taken a step forward 81% of the FTSE EPRA/NAREIT Developed 74% DISCLOSE NAV, Europe indices); 33% of companies disclose all 6 performance measures 64% DISCLOSE EPS; (58% by market capitalisation) adoption of NNNAV is still behind with 56%, but significantly up on last year
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2. Introducing the survey
EPRA’s Best Practices Recommendations EPRA’s Best Practices Recommendations (BPR) include The BPR comprise three sections: specific additional disclosures for real estate companies 1. EPRA performance measures – specific within the IFRS framework: additional disclosures for real estate • Emphasis is placed on six key performance measures, companies within the IFRS framework which EPRA Earnings, NAV, NNNAV, yield, vacancy rate and are deemed to be of key importance for for the first time this year, the cost ratios. investors and where more consistent and • EPRA produces additional guidance on how to apply widespread disclosure is sought – EPRA the EPRA BPR (the latest guidance was issued in earnings, NAV, NNAV, yield, vacancy rate January 2014). and cost ratios. 2. Investment Property Reporting – Purpose of the EPRA Annual Report Survey investment property disclosures providing The purpose of this survey is to promote awareness of guidance in areas where IFRS are not EPRA’s BPR and to encourage companies to recognise considered to be specific enough to real and promote the value in consistency and transparency estate companies such as like-for-like rental in financial reporting. growth, portfolio statistics information.
Awards 3. Additional disclosures – guidance on Recognition is available through the following award further disclosures covering valuation categories: disclosure, management narrative, information on strategy and governance Gold Award information to make the financial reporting For exceptional compliance of real estate companies more insightful. with the BPR
Silver Award For annual reports scoring highly based on compliance with the BPR
Bronze Award For annual reports scoring well based on compliance with the BPR
Most Improved Award For companies that have Each year only one company used to receive outstandingly improved the this award. This year, it was decided to better compliance of their reporting recognize the effort made by companies that with the BPR. have significantly increased their scoring. Hence, companies that showed improvement of their scoring by at least 30% and that were rated Silver or Gold have been granted with the award of the “Most Improved Annual Report”.
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Companies reviewed In Out Annual reports for years ending between 30 June 2013 Deutsche Annington Daejan Holdings PLC * and 31 March 2014 inclusive were reviewed for all Immobilien AG members of the FTSE EPRA/NAREIT Developed Europe REITS and Non-REITS indices, comprising 84 listed real Dios Fastigheter AB IVG Immobilien estate companies across Europe. The Dutch company Redefine International Azrieli Group
Atrium European Real Estate has also been included in Atrium European Real Estate IRP Property Investments the survey. Inmobiliaria Colonial S.A. Mucklow (A.&J.) Group PLC
F&C UK Real Estate Patrizia Immobilien AG Investments GSW Immobilien AG
Silic SA
* not included this year as its FY 14 Annual Report has been released after the survey was performed.
GEOGRAPHICAL LOCATION OF COMPANIES REVIEWED
3 FINLAND
NORWAY 1 9 SWEDEN UK 29
6 NETHERLANDS BELGIUM 7 10 GERMANY AUSTRIA SWITZERLAND 4 2 FRANCE 9 2 ITALY
SPAIN 1 GREECE 1
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A EUROPEAN TEAM OF 30 STAFF FROM DELOITTE OFFICES ACROSS ANNUAL REPORTS REVIEWED IN COMPILING 84 THE SURVEY WERE INVOLVED IN THE SURVEY COMPANIES COUNTRIES THE EURO 29 REPRESENTED ARE REPRESENTED IS THE REPORTING OUT OF THE IN THE SURVEY IN THE SURVEY CURRENCY FOR 13 AROUND HALF OF ARE BASED THE COMPANIES 84 IN THE UK SURVEYED DUE TO THE DEPARTURE OF €THE PORTFOLIO SIZES OF AZRIELI GROUP FROM THE INDEX, COMPANIES IN THE INDEX VARY SIGNIFICANTLY BETWEEN THERE ARE NO SMALLER PORTFOLIOS OF ISRAELI COMPANIES €100 MILLION, REPRESENTED,WHILE TO THOSE VALUED OVER €10 BILLION CONCENTRATION OF SPAIN IS BACK AGAIN THIS YEAR WITH INMOBILARIA MID-SIZED COLONIAL S.A. PORTFOLIOS OF €1-5 BILLION
“We are encouraged by the results of the 2014 BPR survey that highlight further participation among listed real estate companies using the BPR. Furthermore, the hard work undertaken by our committees to develop and improve the BPR is most apparent both through the significant increase in Gold awards seen in 2014 and the excellent take-up in companies reporting the new cost ratios. With a continued focus on outreach and education, we hope to achieve even greater participation among companies in the year ahead.”
Andrew Saunders Finance Director, EPRA
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3. Award winners
GOLD
9 NEW COMPANIES WERE AWARDED A GOLD AWARD
16 COMPANIES HAVE KEPT THEIR GOLD AWARD
HIGHLIGHTS OF GOLD AWARD WINNERS
EPRA Performance Measures summary table included All six EPRA Performance Measures, including the new in prominent position and Performance Measures EPRA cost ratios, shown in a separate EPRA Best Practice integrated throughout financial commentary, KPls Recommendations sections and calculations as and Chief Executive’s report with the company’s set out in the format of the BPR strategic direction and the overall performance review
Detailed information provided on investment assets Analysis of like-for-like rental income growth, by including passing rent, ERV, analysis of lease expiration portfolios and by geographical business segment profile and development property analysis
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SILVER BRONZE Aedifica SA Atrium European Real Estate Limited Affine SA Development Securities PLC Capital & Counties Properties PLC DIC Asset AG Great Portland Estates PLC EuroCommercial Property NV Intervest Offices & Warehouses NW Helical Bar PLC Mercialys SA LondonMetric Property PLC Picton Property Income Limited Société de la Tour Eiffel SA Shaftesbury PLC Workspace Group PLC Swiss Prime Site AG
MOST IMPROVED AWARD
Areas where “Most Improved award” companies have made significant progress: • Disclosures of the EPRA Performance Measures • EPRA keys metrics presented in a separate section that includes a summary table 70% • Disclosure of the calculations and reconciliations of EPRA Performance Measures OF COMPANIES • Property Reporting section contains comprehensive information on facts and trends by country BY MARKET and business segments as well as ample data on the asset portfolio CAPITALISATION ACHIEVED AN AWARD
“2013 has been an important year for NSI. We have done “It has been very beneficial to start the a significant recapitalization through a substantial private project and focus on improving our placement, providing the company the solid financial position for annual report. It has required team effort, the future to further execute its strategy. The reason NSI was in but is has been worthwhile as we have a position to raise these funds was a continuous and consistent received very positive feedback from our communication with investors, building on a credible operational stakeholders.” platform. Comparability to other Real Estate parties through EPRA standards is increasingly important for an international Robert Bolier investor group. We have put a lot of effort to reflect the progress CFO, Wereldhave we made and to improve our internal and external reporting in line with the international best practices. A quality level which we will continue to improve, as we are committed to transparent reporting which adds value for all our stakeholders.”
Daniel van Dongen CFO, Nieuwe Steen Investments (NSI)
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4. Survey results
Figure 1. What is the distribution of scores? Speeding ahead The survey results show that leaders are speeding Number of companies ahead with a significant increase in the number of 50 companies achieving Gold awards. It demonstrates a higher level of adoption and acceptance of the BPR. 40 56% of companies by market capitalisation were bestowed a Gold award compared to 42% last year. 30 There has been a significant improvement in scores of the survey for awarded companies: 20 • Companies scoring more than 70% increased from 25 in 2012/13 to 29 in 2013/14, 10 • While companies scoring less than 40% were almost stable, increasing from 35 in 2012/13 to 36 in 0 2013/14, 0-40% 40-70% 70-100% 2011/12 2012/13 2013/14 • 4 companies achieved an impressive score greater than 90%.
The average score stayed just above 50%. Beyond the overall stability, there is marked concentration of the Leaders are speeding ahead: average effort in adopting the BPR among the best scorers and score of awarded companies increase the rate of awarded companies is almost unchanged: • 50% of the companies in the survey gained an award to 77% from 72% last year this year (50% last year), • 25 Gold Awards, including 9 new companies, granted this year against 18 last year, • 9 Silver Awards and 8 Bronze Awards (versus 14 and 11 last year).
INCREASED Analysis by country ADOPTION OF BPR: This year results are driven by significant improvements in the average scores for the Netherlands, Belgium, France and Switzerland. These countries have all marked stable increases in their scores in the last two 29 years. COMPANIES Awards were given to companies in 7 countries with SCORED MORE all of them receiving at least one Gold award. Similar THAN 70% to last year, Gold awards were given to companies in COMPARED TO Belgium, France, Finland, Germany, the Netherlands, 25 LAST YEAR, Switzerland and the United Kingdom. The United WHILE COMPANIES SCORING LESS Kingdom still has the most Gold award winners, with THAN 40% 6 companies achieving these accreditations. REMAIN STABLE Despite these results being very encouraging and demonstrating a wide adoption of the BPR across Europe, we noted that, as last year, the same three European countries included in the survey (Austria, Greece and Norway) failed to achieve any award, and Spain, Italy and Sweden joined the list this year. Thus, there is clearly room for improvement concerning primarily those companies for which bringing their financial reporting in compliance with the BPR is not yet a priority.
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Figure 2. What is the average score per country?
Average score (%)
80
70
60
50
40
30
20
10
0 Netherlands Belgium France Finland Switzerland UK Germany Sweden Others 2011/12 2012/13 2013/14
… 6 COUNTRIES FAILED TO ACHIEVE AWARDS THIS YEAR, SHOWING ROOM FOR IMPROVEMENT DESPITE THIS YEAR’S POSITIVE TRENDS.
% Gold awards per country % awards per country
57% 67% 100% 100% 33% 57% 80% 89% 25% 56% 75% 86%
2012/13 2013/14 2012/13 2013/14
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Figure 3. How does size of the company influence the score? Scores by the size of the company There remains correlation between company size and Average score (%) the survey results. 90 6 80 • Companies with the largest portfolios, in excess of 70 €5 billion, achieved the highest average scores. 60 40 Speeding ahead, average scores of the largest 18 50 20 companies continues to progress reflecting enhanced 40 compliance with the BPR. 30 • Companies with <€1 billion portfolios achieve the 20 lowest scores, but noticeable improvements have 10 been seen over the last years. 0 0-500m 500m-1bn 1-5bn >5bn Confirmation of the Domino Effect The ripple effect previously noticed in Belgium, where 2011/12 2012/13 2013/14 an increasing number of companies have reached a *Numbers above the columns represent the number of companies by property size high level of compliance, has spread to France and the Netherlands as more and more companies have put particular effort into adopting the BPR throughout the last three years and have been rewarded with an award The 42 companies gaining an award (see timeline below). this year represent 70% of the total We notice that in general a growing number of companies adopt the EPRA BPR. The survey of this year market capitalization of the EPRA index shows really good improvements that could be mostly explained by the above mentioned “domino effect” and 65% of the total property portfolio among the companies that are not only attracted by a reward, but first of all aimed at publishing transparent and high quality reports.
Improvements are still expected for the upcoming years, as companies are paying more attention to their peers and benefit from the support of the new BPR additional guidance issued by the EPRA in January 2014.
GOLD AWARD HISTORY – THE DOMINO EFFECT
FRANCE THE NETHERLANDS 2013/14 2013/14
2012/13
2011/12 2011/12 2012/13
GOLD AWARDS GOLD 5 AWARDS GOLD 4 AWARDS GOLD 2 GOLD GOLD 0AWARD 1AWARD 1AWARD
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5. EPRA reporting measures
EPRA reporting measures Figure 4. What percentage of companies provided EPRA EPS, NAV and NNNAV figures? The scoring of the survey reflects the emphasis the Percentage of companies (%) BPR places on the six key performance measures, EPRA 80 Earnings, NAV, NNNAV, yield, vacancy rate and, for the first time this year, cost ratios. There has been a step 70 ahead in the adoption of all six performance measures, 60 yield and vacancy rates finally continue to gain traction 50 and to catch up with the more widely adopted EPS, 40 NAV and NNNAV performance measures. 30
• 81% of companies disclose at least one of the 20 performance measures (representing 91% by market 10 capitalisation of the FTSE EPRA/NAREIT Developed 0 Europe indices), a progress since last year. EPRA diluted adjusted NAV EPRA diluted NNNAV EPRA diluted EPS • Encouragingly, 33% of companies disclose all six 2011/12 2012/13 2013/14 performance measures against 28% last year for the five requested performance measures. • 64% of companies disclosed EPRA EPS, an increase Figure 5. How well the awarded companies disclosed the EPRA Performances Measures? of 8% on last year; of these, 86% included a full EPS reconciliation to IFRS earnings. 100%
• 74% of companies disclosed EPRA NAV compared 90% to 73% last year, of which 87% included a full NAV Topped up yield 80% reconciliation to IFRS NAV. • Disclosure of EPRA NNNAV trails behind at 56%, 70% through is encouragingly up 5% on last year. 60% • 36% of companies have adopted the EPRA cost 50% ratios. Initial yield NNNAV
The industry remains divided between those companies which choose to fully integrate the EPRA Performance Measures and include discussion and reference to Cost ratio Vacancy the metrics throughout the annual report, and those 2012/2013 2013/2014 companies which primarily make reference to EPRA in an appendix to their annual report.
To help the readers, more and more companies Speeding ahead, awarded companies have significantly disclosed a summary table of EPRA performance increased their compliance with the BPR. measures: 46% against 36% last year. 64% 74% 95% of awarded companies disclosed OF COMPANIES OF COMPANIES the EPRA EPS, NAV, NNNAV, NIY and DISCLOSED DISCLOSED EPRA EPS EPRA NAV Vacancy rate against 85% last year
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Figure 6. How many companies adopted the EPRA yields and vacancy rate measures? • 45% disclose EPRA Net Initial Yield (NIY) against 37% last year. Of these, 82% set out a clear calculation of Percentage of companies (%) the yield presented in the format included in the BPR, 60 a substantial increase compared to 69% last year.
50 • 42% of companies disclosed EPRA Topped-Up NIY, against 35% last year. 40 • 55% of companies disclosed EPRA vacancy rate, a move forward on 38% last year. Of these, 50% of 30 companies made additional comments.
20
Spotlight on EPRA yield 10 As last year, we identified some companies describing the EPRA yield as being identical to 0 EPRA net initial yield EPRA "topped-up" net initial yield EPRA vacancy rate their external valuers’ yield, with no further 2011/12 2012/13 2013/14 details of calculations or inputs given. Other companies gave a clear reconciliation between the EPRA yields and theirs own yields, again with no further details of calculations.
Figure 7. How many companies disclosed the new EPRA Cost Ratios this year? A clear calculation of the EPRA yield
Cost ratio excluding direct vacancy costs Cost ratio including direct vacancy costs measure set out in the format of the BPR would enable analysts and investors to compare companies. 32% 36%
68% 68%
Yes 61% No OF COMPANIES BY MARKET CAPITALISATION HAVE EPRA cost ratios have been introduced into the BPR guidance for the first time this ALREADY ADOPTED AT LEAST year. For a first time implementation, the rate of disclosures is encouraging. ONE OF THE NEW EPRA
However, companies are also encouraged to use the EPRA Cost Ratios as a base-line COST RATIOS to provide additional disclosures, where appropriate, on costs in the context of their own business model.
“Once again the financial reporting bar has been raised even higher with companies showing a commitment to improving the quality of their annual reports and giving greater transparency on their performance.”
Laure Silvestre-Siaz Partner, Head of Real Estate, Deloitte France
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6. Investment property reporting
Investment property reporting Like-for-like information is of key importance to Whilst the BPR places emphasis on the EPRA stakeholders to estimate the organic growth. Performance measures, the requirements of the However, only 64% of companies disclosed a like- BPR in relation to investment property reporting are for-like rental figure, a slight increase of 4% on last equally important. However, it appears companies year. This percentage in disclosure of rental growth have paid less attention to this section, with still little on a like-for-like basis have slightly improved (64% of improvement on last year, and some disclosures, companies), but still lags behind disclosures of the EPRA including those in relation to development assets Performance Measures. poorly adopted. Like-for-like analysis represents a useful tool in assessing With the BPR being supplemented last year to the operational performance of a company, other than incorporate the new EPRA Cost Ratios and additional from acquisitions and disposals; it would be beneficial BPR guidance issued in January 2014, now is the time for investors and analysts if more companies provided for companies to re-go through the sections 4.3 and this disclosure. 4.4 of the BPR to enhance the compliance of the information provided in their annual report. Valuation information
Figure 8. How many companies apply the fair value model? Figure 10. How often do companies disclose they externally value their properties?
6% Percentage of companies (%) 60
50 Cost model Fair value model 40
94% 30
20
10 In accordance with EPRA’s recommendations, 94% of companies applied the fair value model in assessing the 0 value of their investment portfolio. There has been a Annually > Twice annually Not disclosed slight increase from prior year. 2011/12 2012/13 2013/14 95% of companies use an external expert for valuation Like-for-like rental growth reporting of their properties. Out of these: • 91% of companies use an external valuer at least Figure 9. What percentage of companies disclose annually, with 46% applying best practice by valuing like-for-like rental income growth? Percentage of companies (%) properties at least twice a year, a step forward of 8% 80 on last year. • 89% disclosed the names of the external firms 70 undertaking the valuations. 60 • Only 38% of companies either provided a summary 50 of the valuation report/certificate or a table 40 reconciling to the financial statements. 30 • Only 33% of companies disclose the basis for valuers’
20 fees. There remains room for improvement for this section 10 of the financial reports. Developing the disclosures of 0 valuation information would help companies increase 2011/12 2012/13 2013/14 confidence in the listed property sector due to the credibility of regular external valuations.
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Figure 11. What is the average level of disclosure of investment property reporting information?
Level of disclosure (%)
100 2012/13 2013/14 90 80 70 60 50 40 30 20 10 0 Accounting Basis Valuation Like-for-like Investment Additional Development under IAS 40 information rental growth assets portfolio assets information
Information on “assets under development” remained “Accounting Basis under IAS 40”: all companies the most poorly disclosed section; it trails behind at disclose the model used to account for their investment 32%. Disclosures on development assets should include properties (value model or cost model). information such as type and location, costs incurred in development at the reporting date and costs to This brings the total level of investment property completion, estimated rental value, expected date of reporting disclosures to an average score just below completion, type of ownership. Such disclosures would 50%, comparable to last year. Being one of the key serve to give to investors a better understanding of sections used by investors to gain a clear view of a the potential risks and opportunities associated with property company performance and portfolio, it is development assets that can be a source of important definitely an area where real estate companies should value creation for real estate companies. focus to improve the quality and the transparency of their annual report. As required by the BPR, “additional portfolio information” should comprise rental data, valuation and lease data, as well as additional information on The average level development property. The level of disclosure of this section stands at only 43%, stable on last year. of disclosure in the
“Like-for-like rental growth” disclosure also stands at investment property 64% this year. However, detailed information by sector or geographical business segment of the portfolio or reporting section assumption underlying the like-for-like information are too often lacking, with scores around 30%. stayed relatively low
“Investment assets” disclosure stands at 57%. The and significantly behind BPR requires detailed information on the company’s investment properties, with a focus on major the expected level of properties. compliance
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7. Reporting Developments
News.fr Search News Politics Finance Technology Health Sport Arts
Hot topics Following the release in July examples of disclosures for each 2013 of the EPRA cost ratios, EPRA Performance Measure an additional guidance to the and other information such as BPR was published in January like-for-like rental growth or 2014. Its purpose is to clarify rental data. Organised with a issues arising from the BPR. structure similar to the BPR, this It supplements BPR issued guidance addresses issues such in August 2011 which are as cost of early close-out of debt principles based, with extensive instruments, convertible bonds description of the rationale including net share settled behind each recommendation. convertible bonds, purchaser’s Companies are encouraged to transactions costs for EPRA net participate to this guidance, yield calculation, definition of which is intended to be a “live” vacant spaces. document with regular updates. It contains definitions, Q&A and
In the next months, further developments are expected It will provide useful tools to help companies lagging with the release of a full update of the BPR document. behind to catch up with the best scorers that are It will probably include recommendations on capex speeding ahead. disclosure, cash earnings measure and Loan-To-Value This continuous effort to raise the bar in terms (LTV). of consistency and quality of reporting across With this new guidance, EPRA continues to respond to the European property sector will foster greater the needs of stakeholders, being the preparers or the transparency and comparability of the financial users of the financial statements. statements and, hence, potentially attract new investors.
“We continue to develop the EPRA Best Practices Recommendations with a LTV metric and enhanced disclosure around Capex the current focus of the BPR Committee. A number of EPRA member’s volunteer their time to discuss and debate the EPRA metrics with the goal of achieving greater transparency and comparability across Europe and I would like to thank them for their valued contribution”
Simon Carlyon Director of Finance, SEGRO and Chair of EPRA BPR committee
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8. Award process
THE REVIEW PROCESS A detailed process was undertaken by the Deloitte real estate assurance team, comprising members from across Europe, to assess the annual reports of DETAILED PRIMARY REVIEW the 84 companies included in the FTSE EPRA/NAREIT OF ALL ANNUAL REPORTS WAS PERFORMED BY Developed Europe REITS and Non-REITS indices. THE DELOITTE REAL ESTATE ASSURANCE TEAM Where applicable, Deloitte client engagement teams were excluded from the review of the relevant 1 company annual reports to ensure that objectivity was maintained. A questionnaire set by Deloitte containing the key areas of focus based directly on the EPRA BPR was followed as was consistent across each of the companies surveyed.
SECONDARY REVIEWS WERE PERFORMED BY DELOITTE REAL ESTATE SPECIALISTS FOCUSING ON AREAS OF JUDGEMENT 2 AND KEY MEASURES
RANKING OF ALL COMPANIES BASED ON SCORING AND BPR SECTION WEIGHTING 3 AS PRE-DETERMINED IN CONJUNCTION WITH EPRA
BASED ON THE RESULTS, COMPANIES WERE IDENTIFIED FOR THE GOLD, SILVER 4 AND BRONZE AWARDS
THE MOST IMPROVED REPORTS 5 WERE IDENTIFIED BASED ON THE LARGEST INCREASES IN SCORE IN COMPARISON TO THE PRIOR YEAR REVIEW
REVIEW AND DEBATE 6 OF DELOITTE ANALYSIS WITH EPRA AND CONCLUSION ON AWARDS TO BE ALLOCATED
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9. Participant list
Aedifica SA Inmobiliaria Colonial SA
Affine SA Intervest Offices & Warehouses NW
Allreal Holding AG Intu Properties PLC
Alstria Office REIT-AG Klépierre SA
ANF-Immobilier SA Klovern AB
Atrium European Real Estate Limited Kungsleden AB
Befimmo SA (Sicafi) Land Securities Group PLC
Beni Stabili SpA Leasinvest Real Estate SCA
Big Yellow Group PLC LEG Immobilien AG
The British Land Company PLC LondonMetric Property PLC
CA Immobilien Anlagen AG Medicx Fund Limited
Capital & Counties Properties PLC Mercialys SA
Castellum AB Mobimo AG
Citycon OYJ Nieuwe Steen Inv NV
Cofinimmo SA Norwegian Property ASA
Conwert Immobilien Invest SE Picton Property Income Limited
Corio NV Primary Health Property AG
Derwent London PLC Prime Office REIT-AG
Deutsche Annington Immobilien SE PSP Swiss Property AG
Deutsche EuroShop AG Quintain Estates and Development PLC
Deutsche Wohnen AG Redefine International PLC
Development Securities PLC Safestore Holdings PLC
DIC Asset AG Schroder Real Estate Investment Trust Limited
Dios Fastigheter AB Segro PLC
Eurobank Properties Real Estate Investment Co SA Shaftesbury PLC
EuroCommercial Property NV Société de la Tour Eiffel SA
F&C Commercial Property Trust Limited Sponda OYJ
F&C UK Real Estate Investments Limited St.Modwen Properties PLC
FABEGE AG Standard Life Inv Property Income Trust Limited
Fastighets AB Balder B Swiss Prime Site AG
Foncière des Régions SA TAG Immobilien AG
Gagfah SA Technopolis OYJ
Gecina SA UK Commercial Property Trust Limited
Grainger PLC Unibail - Rodamco SE
Great Portland Estates PLC Unite Group PLC
Hamborner REIT-AG Vastned Retail NV
Hammerson PLC Wallenstam AB
Hansteen Holdings PLC Warehouses De Pauw Comm. VA
Helical Bar PLC Wereldhave NV
Hufvudstaden AB Wereldhave Belgium Comm. VA
Icade SA Wihlborgs Fastigheter AB
Immobiliare Grande Distribuzione SPA Workspace Group PLC
Speeding ahead - EPRA Annual Report Survey 2013/14 17 Deloitte has an unparalleled breadth and depth of services which make it a world force in its chosen arears of business – audit, tax, consulting and corporate finance. As a leading business advisory firm, we are renowned for our commitment to innovation quality, client service excellence and for the calibre of our people. We serve governments and a broad range of public sector departments, major international and leading corporates, mid-market and high growth smaller companies and may private individuals. By harnessing talent and expertise across the firm, we deliver solutions to clients that inspire confidences in what we promise. Deloitte Real Estate redefines the concept of a full-service real estate business, offering a breadth of capability and an innovative approach unequalled in the market. Our team combines traditional property services with financial and business advisory expertise to deliver integrated solutions on the most simple assignment to the most complex. We apply a depth of insight drawn from our understanding of all industries and sectors to advise occupiers, lenders, investors and the public sector on every aspect of real estate in an increasingly complex world. And as is the case with all of Deloitte’s services, you can be assured of our relentless focus on continually providing the highest standards of quality and integrity.
EPRA was established in 1999 and now represents over 300 billion of real estate assets – 90% of the market capitalisation of the FTSE EPRA/NAREIT Europe Index. EPRA’s mission is to promote, develop and represent the European public real estate sector. Its members constitute property companies, investors, advisers and academics in the real estate sector. EPRA provides effective and continuous leadership in matters of common interest by publishing research and encouraging discussion of issues impacting the industry both within the membership and with a wide range of stakeholders, including the EU institutions, governmental and regulatory bodies, and business partners. EPRA works to foster trust and encourage greater investment in listed real estate companies in Europe. EPRA develops policies concerning standards of reporting disclosure, taxation and industry practices, including EPRA Best Practice Recommendations (BPR). The EPRA BPR provides guidance for property investment companies on interpretations of IFRS, industry specific reporting practices, and key performance indicators. The aim of the EPRA BPR is to “raise the bar” for listed for property investment companies in Europe through improved consistency, comparability and transparency in reporting practices. The EPRA BPRs are continuously developed through wider consultation with EPRA members and other interested parties and fall under the jurisdiction of the EPRA Reporting and Accounting Committee.
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